Sudden Urban Growth 1
Sudden urban growth feeds on migration. This suggests a clear advantage of the city over the existing alternatives, an advantage that must be created suddenly and must persist with city growth. The simplest construct sufficient to explain sudden urban growth is a city partitioned into two concentric zones, occupied by production and residences respectively. Every individual travels to work along the radius passing through his residence. The chapter focuses on the premise that the marginal value of land used in the production of the private good is invariant with city size and that there are constant returns to scale in land as a factor of production. Both urban population and utility have increased as the system moves from its underdeveloped to its developed state implies a positive overall income effect on the average utility stronger than the corresponding negative population effect. Hence development in laissez–faire economies may increase rather than decrease social inequality.